Jason Stern Of Simfoni: “Segment your spend”

Segment your spend with a differentiated delivery approach per zone, to enhance return on spend under management. Separate the wheat from the chaff — when teams manage tactical spend alongside strategic spend, they are too busy chasing their tails to devote time to category plans. It’s critical to sort out what’s important vs. what seems urgent on […]

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Segment your spend with a differentiated delivery approach per zone, to enhance return on spend under management. Separate the wheat from the chaff — when teams manage tactical spend alongside strategic spend, they are too busy chasing their tails to devote time to category plans. It’s critical to sort out what’s important vs. what seems urgent on a day-to-day basis.

Jason Stern is a proven entrepreneur with over two decades of experience growing revenue, developing and executing strategies, and building great teams at successful technology start-ups. He currently serves as CEO of Simfoni Analytics, a next-generation digital solutions provider that empowers procurement professionals through AI-powered spend analytics, thereby optimizing cost efficiency and reducing supply chain risk through strategic sourcing. Simfoni has achieved a number of notable growth milestones in the past year, adding 23 new enterprise customers, and increasing monthly recurring revenue by more than 325%. Prior to Simfoni, Jason co-founded and served as President of betmo, a free social peer-to-peer sports wagering app that makes betting with friends fun. Prior to that, he co-founded and served as Chief Revenue Officer at Driveroo, a company that utilizes AI-based technology to transform the way fleet owners and employees care for their vehicles. Jason has held executive management positions at Jelli, Model N, and Selectica, and senior advisory positions for Meetyl and Cisco. He began his career working in product management at Sanwa Bank and Oracle, after earning his MBA in Marketing and Information Systems at the University of Southern California. He is a loyal fan of the Los Angeles Dodgers.

Thank you so much for joining us in this interview series. Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I’ve been working in the enterprise software space for more than 20 years. I spent nearly 7 years of my career at Selectica (now a subsidiary of the software company Corcentric), a publicly-traded company in the contract lifecycle management space. After leaving moving on from that company in 2013, I held senior management positions at a number of technology startups. Last year I was introduced to the founder of Simfoni, a company that delivers digital transformation through next-generation spend analytics and buying automation. This happened right after the company had raised their Series A round of VC funding, and they wanted to expand their presence in the US. The timing was perfect for me to make a change, and I had the right kind of experience they were looking for, because I was already very familiar with the procurement software space, and their KPIs were similar to Selectica’s. I joined the company as CEO of Analytics in March 2020.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?

I had just started a new job as Head VP of Products at a technology company and they were releasing a major product. So, I sent an email out to all of their stakeholders to announce that the product was live, but unfortunately, instead of saying that the product was “now” available, my email said that it was “not” available. That caused a lot of confusion. From that experience, I learned to proofread my emails better.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Early in my career, I was a Product Manager at a small software company called I-many (later bought by Model N). I went into a meeting with the President & CEO of my company and explained to them why the product I was managing should be discontinued. They were somewhat stunned, but I had a number of valid reasons because the product wasn’t profitable or strategic for the company in any way. But instead of letting me go, they ended up promoting me to VP Product Management.

The executive who did that was Terry Nicholson, and he ended up becoming a mentor to me in my career. After I-many, he brought me with him to Selectica, a company that I eventually ended up running. Ten years ago, he passed away quite suddenly. I went to his funeral in St. Louis and met his daughter, Shannon Wegner, who was at the time working as a Category Manager. After starting at Simfoni, I was looking for people I know in procurement looked her up on LinkedIn, and she was venturing into sales roles. Shannon became my first hire at the company as Head of Partnership.

Is there a particular book, podcast, or film that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

I have two. The first is Moneyball by Michael Lewis, which I love because of the way it illustrates the use of analytics to make decisions — something I’m a big believer in. The second is Crossing the Chasm by Geoffrey Moore, which is still just as relevant now as it was when it came out 30 years ago. I really can’t name a better business book.

Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose

We like to refer to our company, Simfoni, as “procurement with a purpose.” In the business world, it’s natural for people to drive toward saving money, but people in procurement are starting to realize that there’s another cost that is much greater. Climate change is just one aspect, causing people to look at ways to reduce their carbon footprints, not only for their own businesses but also throughout their supply chains. We are introducing people to new ways to measure the impact of their supply chain, with the goal of helping people make better decisions based on data. In addition, we have delivered a way for companies to improve their spending with Diverse Suppliers, based on the events of the past year this too has been a huge driver for Analytics.

Are you working on any new, exciting projects now? How do you think that might help people?

The founder of Simfoni, Chirag Shah, saw a glaring need for companies to improve efficiency in managing their spending. It’s easy to improve the top line spend, but improving the bottom line is harder. He envisioned a better way to approach this by creating a solution that packages advanced technology with pre-existing content and experts, filling in the gaps necessary to get the system up and running quickly. This combined solution removes barriers to entry for companies that want better manage to spend but might not be able to afford an expensive procurement suite. So, we’re very excited about serving that market with a disruptive solution.

Thank you for all that. Let’s now turn to the main focus of our discussion about Digital Transformation. For the benefit of our readers, can you help explain what exactly Digital Transformation means? On a practical level what does it look like to engage in a Digital Transformation?

In our world, digital transformation means moving away from paper-based systems and processes toward a more structured methodology, where you can leverage data as a basis for decision making. When I first got into this industry, it wasn’t uncommon for businesses to mail paper invoices. As email became more common, people started to invoice electronically — but ironically, paper usage actually went up because people just printed out their emails. So, the usage of electronic copies didn’t solve everything in and of itself. What we really mean by digital transformation is setting up a system where information can be loaded and processed automatically, without requiring a human touch. The data within that system then becomes actionable, rather than siloed in paper files or on hard drives that can’t be accessed or utilized. This increases efficiency enormously. Each paper invoice costs 24 dollars to process, in terms of people’s time and effort. An emailed invoice costs 18–20 dollars to process. But when you have the ability to extract data from a .pdf and load it automatically into an ERP system, it only costs .05 dollars . And when you add additional capabilities like the ability to spot anomalies, it saves even more.

Which companies can most benefit from a Digital Transformation?

The businesses that can benefit most are those that haven’t yet invested in their digital journey. These tend to be mid-market companies that have no invoice portal, no procurement payment system, no contract repository with meta-data extraction, etc. These kinds of companies can quickly and easily go from having no technology to having a best-in-class system that automates everything, almost overnight. They haven’t yet invested in something that is becoming obsolete, so they can leapfrog to take advantage of the latest technology innovation like Artificial Intelligence.

We’d love to hear about your experiences helping others with Digital Transformation. In your experience, how has Digital Transformation helped improve operations, processes and customer experiences? We’d love to hear some stories if possible.

One example is Dulsco, large waste management and managed services company based in the Middle East. Dulsco used to purchase through a 3rd party. They wanted to automate their manual purchasing processes in order to realize savings to fund their growth plans. Simfoni analyzed their spending patterns and identified cost reduction opportunities in areas such as transportation, fuel, oils and lubricants, tires, IT, travel, construction and insurance. We formulated a savings delivery plan and a quick-win program that enabled Dulsco to achieve more than 10% cost savings in the first 12 months.

We also work with one of the most recognized commercial cooking appliance brands in the U.S. At the point we engaged with them, their procurement processes were still largely manual. They needed to manage costs to ensure that they could continue to innovate. They deployed Simfoni’s spend automation across their divisions and realized significant cost savings within the first 2 weeks.

Has integrating Digital Transformation been a challenging process for some companies? What are the challenges? How do you help resolve them?

In many ways, the Pandemic has driven the demand for digitized solutions more than anything that came before. Paper and emails are extremely inefficient to manage in normal times, but in the face of the COVID-19 pandemic, it became even more urgent to switch immediately to digitized solutions that would enable people to work from home.

Because of the way the Simfoni platform is implemented, our clients don’t experience as many issues with change management. Often, when you implement new technology, you encounter some push-back, especially when taking processes from unstructured to structured. But our solutions provide more value from the beginning because they save time and require less effort from the user. Almost everyone is comfortable ordering from Amazon and other e-commerce websites, so that part is easy. It used to take 6 months of research to compile the kinds of analysis we can provide at their fingertips. So, our solution allows people to actually do their jobs better, rather than just being reactionary.

Ok. Thank you. Here is the primary question of our discussion. Based on your experience and success, what are “Five Ways a Company Can Use Digital Transformation To Take It To The Next Level”? Please share a story or an example for each.

Here are 5 steps toward digital transformation, specifically in the area of procurement and supply chain management:

1. Segment your spend with a differentiated delivery approach per zone, to enhance return on spend under management. Separate the wheat from the chaff — when teams manage tactical spend alongside strategic spend, they are too busy chasing their tails to devote time to category plans. It’s critical to sort out what’s important vs. what seems urgent on a day-to-day basis.

2. Use data analytics to derive improvement opportunities. Ideally, find a solution that uses advanced algorithms, machine learning, and existing vendor mapping know-how to rapidly cleanse and classify data with a high degree of accuracy. Leverage business intelligence software to produce out-of-the-box visuals that are attractive to look at and easy to interpret.

3. Automate your buying process for low-value transactions. Non-strategic “tail spend” typically consumes a disproportionate amount of time and effort, distracting category managers from their primary objectives. Once you’ve identified your tail spend, automate your purchasing processes through e-Commerce resources (e.g. marketplaces, catalogs).

4. Implement a requisition system so that you can capture all purchasing requests digitally, and utilize resources to locate the right product/service.

5. Automate transactional processing for the back office. All contracts should be digitized in a safe repository with meta-data extracted, invoices need to be electronic for payment processing and reduced overhead.

Successful deployment of a digital strategy will have a much wider impact in the organization than simply cost reduction; procurement will be at the forefront of managing risk, delivering Corporate Social Responsibility objectives, and predicting trends that influence the overall corporate budget.

As an example, we work with Owens & Minor, a global healthcare logistics company that employs 15,000 people in 70 countries. Before they digitized their supply chain management, they lacked the capability to manage their tail spend across nine European countries, and therefore struggled to deliver saving and target service levels. After deploying the Simfoni Spend Automation platform across divisions, they achieved over 500K dollars of savings within 3 months, and later realized millions of dollars in savings from direct and indirect spend categories.

In your opinion, how can companies best create a “culture of innovation” in order to create new competitive advantages?

We foster a culture of innovation by cheering people on for trying. When we are hiring new people, I always tell them that it’s always okay to try something new. If it goes well, that’s great. If not, it’s okay to fail — just fail fast, then move on. So, we let people know that if they have an idea, don’t be shy, bring it up! We can’t promise that every single idea will be implemented, but we do get some of our best ideas from employees. And we get a lot of ideas from our customers, as well. They come up with new applications for our product that we never would have thought about.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“The essence of strategy is choosing what not to do.” Michael Porter

How can our readers further follow your work?

You can always find me on Linkedin and also check out the Simfoni blog to see what’s new.

Thank you so much for sharing these important insights. We wish you continued success and good health!

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